Muni labor deal could cost more in long run

TRANSPORTATION Concessions from drivers could pare service cuts but also increase deficit

Rachel Gordon, Chronicle Staff Writer

Published
4:00 am PST, Saturday, February 13, 2010

MUNI riders transfer at the bus stop on the corner of Fillmore and Geary Streets in the San Francisco, Calif on Thursday January 28, 2010. With the Municipal Transportation Agency facing a $53 million budget deficit next year, they are considering fare increases to some of the most vulnerable riders who use the system. The the problem could balloon to almost $103 million if proposed fare increases and service cuts -- which would be among the deepest in Muni's history -- aren't approved quickly to balance this year's budget shortfall. Among the recommendations: reduce the frequency of bus and rail service on most routes, equivalent to a 10 percent cut systemwide; charge Fast Pass users a premium for using express buses or cable cars; double the cost of discounted monthly passes for seniors, youth and the disabled to $30. less

MUNI riders transfer at the bus stop on the corner of Fillmore and Geary Streets in the San Francisco, Calif on Thursday January 28, 2010. With the Municipal Transportation Agency facing a $53 million budget ... more

Photo: Michael Macor, The Chronicle

Photo: Michael Macor, The Chronicle

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MUNI riders transfer at the bus stop on the corner of Fillmore and Geary Streets in the San Francisco, Calif on Thursday January 28, 2010. With the Municipal Transportation Agency facing a $53 million budget deficit next year, they are considering fare increases to some of the most vulnerable riders who use the system. The the problem could balloon to almost $103 million if proposed fare increases and service cuts -- which would be among the deepest in Muni's history -- aren't approved quickly to balance this year's budget shortfall. Among the recommendations: reduce the frequency of bus and rail service on most routes, equivalent to a 10 percent cut systemwide; charge Fast Pass users a premium for using express buses or cable cars; double the cost of discounted monthly passes for seniors, youth and the disabled to $30. less

MUNI riders transfer at the bus stop on the corner of Fillmore and Geary Streets in the San Francisco, Calif on Thursday January 28, 2010. With the Municipal Transportation Agency facing a $53 million budget ... more

Photo: Michael Macor, The Chronicle

Muni labor deal could cost more in long run

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A proposal that initially would save Muni $14.8 million in labor costs and blunt service cuts and fare hikes could actually push the transit agency deeper into debt.

Muni drivers are set to vote Tuesday on a plan that would help the deficit-plagued agency reduce labor costs. Money from the union concessions would be used to pare back planned service reductions from 10 percent to 8 percent, and at least temporarily abandon the hugely unpopular plan to double to $30 the cost of discounted monthly passes for seniors, the disabled and youth - a move that would curb the agency's ability to generate revenue and cut operating expenses.

The bottom line: Muni's projected $53 million deficit for the next fiscal year could climb to $58 million.

A bigger deficit could eventually lead to deeper service cuts and steeper fares, and fee and fine increases that affect transit riders and drivers. Layoffs could also escalate.

Muni already raised fares and imposed service cuts late last year that have led to longer waits and more crowding.

The agency, with a $783 million annual operating budget, has lost $230 million in revenue over the last two years and wiped out its reserves. The biggest hit has come from the state, which has cut off the flow of funding for transit operations. The agency is trying to fill a $16.9 million budget gap for this year before deciding how to balance the budget for the next fiscal year.

"It's a good deal and we need it to be ratified," Mayor Gavin Newsom said of the plan going before Muni drivers. Newsom helped negotiate the tentative concessions agreement with Transport Workers Union, Local 250-A. He declined to comment further.

Given the fierce debate among union leaders that took place last week during their tense closed-door negotiations with the mayor and Muni management, ratification is not assured. Union president Irwin Lum has refused to comment.

Proposed savings

The proposed concessions, outlined in a memo distributed to Muni's governing board and administrators and obtained by The Chronicle, would amount to nearly $15 million in savings over two years.

The biggest savings would come next year when Muni's roughly 2,000 bus, train and cable car operators would make a one-time contribution to their pension fund that would save $8.9 million.

The other big cost saver would be a change to the overtime rules so that drivers couldn't earn the higher overtime pay until they first log 40 regular hours on their weekly timecard.

What the talks didn't address was the $8 million or more in raises Muni operators are automatically set to receive next year.

Their pay, set by a formula enshrined in the voter-approved city charter, guarantees them the second-highest salary among transit operators in the country.

Supervisor Sean Elsbernd proposed a June ballot measure to remove the salary-setting formula from the charter and subject driver pay to collective bargaining, just like other city employees. But he couldn't get the political backing at City Hall, where city employees' unions, including the powerful firefighters, united against the plan.

Elsbernd hasn't ruled out trying to put his proposal before voters in November through the initiative process.

He said two factors will help inform his decision: whether the drivers ratify the agreement the mayor helped negotiate and whether an analysis he requested from the city controller will show that the concessions will provide ample cost savings given the guaranteed raise.

Budget options

As it is, Muni will be out nearly $10 million next year if the cost increase in discount passes and the 10 percent service cuts are kept off the table, officials confirmed.

In addition to labor givebacks, several other proposed solutions to keep the budget balanced remain up in the air. They include recouping $11 million in the sale of taxi permits under a program not yet approved, and securing $7 million from the County Transportation Authority, which is under Board of Supervisors' control.

Supervisor Ross Mirkarimi, who chairs the authority's governing board, said he won't support Muni's request unless the supervisors have a lot more say over Muni's budget. "We don't want to just be seen as some glorified ATM," he said.

Muni doesn't have much time to find a fix. The Muni board of directors has a meeting Feb. 26 to consider recommendations to balance the current budget.